Local Indian hot rolled coil (HRC) prices have continued their upward trend for the sixth consecutive week, gaining INR 350/mt ($5/mt) week on week to INR 38,350/mt ($539/mt) ex-works as most large domestic steel mills have announced higher base prices for the current month and as there have been fresh bookings by market participants anticipating a another base price hike before the end of January, SteelOrbis learned on Monday, January 13.
According to traders, the market is expecting a significant fiscal stimulus to growth when the government places the national budget before parliament on February 1 and the fresh bookings have been in anticipation of a reversal of sluggish demand.
Market sources said that most large steel mills increased base priced by INR 750-1,000/mt ($11-14/mt) and that large integrated steel mills seeing prices consolidating at higher levels for the sixth consecutive week could continue to push prices higher by announcing a second base price hike of a similar amount before the end of January, triggering a rush among intermediaries and end-users to restock.
“The HRC market is seeing a lot of positives. The market is banking on a definite government stimulus to revive growth and this will lead to higher steel consumption. Steel mills have also reportedly lowered inventories by 30-40 percent over the last two months through adjustment of plant capacity utilizations,” a Mumbai-based trader said.
$1= INR 71.20